It finally closed at 74.32, gaining 52 paise over its previous close. This is the highest closing level since March 18 when the unit had settled at 74.26.
The Rupee soared by 52 paise to close at a more than five-month high of 74.32 against the U.S. dollar on Monday in line with upbeat domestic equities and sustained foreign fund inflows.Besides, a weaker American currency against global peers also supported the Indian unit to log its best single-day gain in one-and-a-half months.At the interbank forex market, the Rupee opened lower at 74.91 against the U.S. dollar but regained strength as the session progressed. It oscillated between a high of 74.31 and low of 74.91 during the day.It finally closed at 74.32, gaining 52 paise over its previous close. This is the highest closing level since March 18 when the unit had settled at 74.26.Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said, “Rupee ended higher on Monday on likely overseas inflows into local stocks amid a weak greenback after the U.S. drug regulator authorised the use of blood plasma from recovered patients as a treatment option for coronavirus (COVID-19).“Foreign banks were all on sell side. FII inflows lined up into domestic stocks which supported rupee demand. The broad trend remains weak with resistance at 74.65 and support at 73.70-73.95”.The dollar index, which gauges the greenback’s strength against a basket of six currencies, was down 0.35% at 92.92.Exchange data showed that overseas investors bought ₹410.16 crore shares on a net basis on Friday.Overseas investors have put in ₹41,330 crore in Indian markets on net basis in August so far as the excess liquidity in global markets found its way to emerging markets like India.“A sharp appreciation has been witnessed in rupee amid the persistent portfolio inflows and as the domestic currency was eventually seen mirroring the decline being seen in the dollar index. The domestic currency had been trading in a range of 75.50-74.50 for quite some time, but has finally managed to breach the crucial hurdle of 74.50 mark to edge higher,” Sugandha Sachdeva VP-Metals, Energy & Currency Research, Religare Broking said.“In the current scenario, the unfettered money printing drive by the major Central banks has fuelled the ‘risk on’ trade in markets even as the COVID-19 crisis rages on,” Mr. Sachdeva added.On the equity market front, the BSE benchmark Sensex rose 364.36 points or 0.95% to settle at 38,799.08 while the NSE Nifty gained 94.85 points or 0.83% to end at 11,466.45.Meanwhile, global crude oil benchmark Brent was trading 0.60% higher at USD 45.20 per barrel.
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